WORCESTER, MA – Mustang Bio , Inc. (NASDAQ:MBIO), a micro-cap biopharmaceutical company with a market capitalization of $12.36 million, announced today that it has received approval from its shareholders to issue over 34 million shares of common stock. According to InvestingPro data, the company faces significant financial challenges, with an EBITDA of -$20.53 million in the last twelve months. This consent from the majority of the voting power was gained through a written agreement on January 10, 2025, to comply with Nasdaq Listing Rule 5635(d).
The shares in question are linked to outstanding warrants previously issued by Mustang Bio. These are associated with an Investor Inducement Letter Agreement dated October 24, 2024, with an institutional investor, and an engagement letter dated October 23, 2024, with H.C. Wainwright & Co., LLC, the placement agent. The issuance will equate to or exceed 20% of the company’s common stock outstanding before the warrants were issued.
The written consent was provided by holders of 6,552,781 shares of Mustang Bio’s common stock and 250,000 shares of Class A Preferred Stock. Each share of common and Class A Preferred Stock grants one vote on shareholder matters, with each share of Class A Preferred Stock carrying the voting power equivalent to 285 votes as of January 10, 2025. Collectively, this represents approximately 57% of the voting power of the company’s capital stock as of the consent date.
Following the SEC's regulations, Mustang Bio will file a definitive information statement on Schedule 14C with the SEC and distribute it to the company’s stockholders. This move is part of the company’s efforts to ensure compliance with corporate governance requirements and to provide transparent communication with its investors.
The approval by the shareholders is a significant step in Mustang Bio's corporate strategy, enabling the company to potentially raise capital through the issuance of new shares. This could support the company's ongoing research and development initiatives in the pharmaceutical preparations sector. Mustang Bio’s executive leadership, including President, CEO, and Interim CFO Dr. Manuel Litchman, is responsible for the execution of this strategic move, as indicated by the formal documentation of this report.
In other recent news, Mustang Bio has been navigating through significant developments. The biopharmaceutical company recently held its annual meeting of stockholders, re-electing seven directors and ratifying KPMG LLP as its independent auditor for the fiscal year ending December 31, 2024. The re-elected directors are Michael S. Weiss, Manuel Litchman, M.D., Lindsay (NYSE:LNN) A. Rosenwald, M.D., Neil Herskowitz, David Jin, Adam Chill, and Michael Zelefsky, M.D.
In a separate development, Mustang Bio is facing potential delisting from Nasdaq due to non-compliance with the exchange's listing requirements. However, the Nasdaq panel has granted the company an extension until 2025 to meet these requirements. In response to the resignation of James Murphy, the company appointed Manuel Litchman, its current President and CEO, as the Interim Chief Financial Officer.
To address its equity shortfall, Mustang Bio announced a registered direct offering and concurrent private placement of common stock and warrants, aiming to generate an estimated $2.5 million. The company also reported a 90% response rate in its Phase 1/2 clinical trial for a rare blood cancer treatment, contingent on securing additional funding or strategic partnerships.
Regarding analyst updates, H.C. Wainwright has increased its stock target for Fortress Biotech (NASDAQ:FBIO), Mustang Bio's founding company, despite a reduced revenue forecast for 2024.
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